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Cotton Claims. 



The New Act of Congress, 

its Benefits and its 

Limitations. 



BY 

WILLIAM B. KING, 
of the Bar of the Court of Claims. 



WASHINGTON, 

1911. 






Copyright, 1911, 

by King & King, 

No. 728 P7th Street, 

Washington, D< 0. 



©r,[.A287866 



COTTON CLAIMS 

By William B. King 
of the Bar of the Court of Claims. 



Newspaper articles and private letters from all 
over the South show that a large amount of misap- 
prehension exists in the Southern States in regard 
to the scope and effect of the recent provision made 
by Congress for claims for cotton seized at the close 
of the Civil War. The object of this statement is 
to furnish exact information on the subject. 

THE STATUTE. 

This provision forms a part of the general Judicial 
Code, an enactment of 301 sections. Sec. 162 is as 
follows : 

" Sec. 162. That the Court of Claims shall have 
jurisdiction to hear and determine the claims of 
those whose property was taken subsequent to 
June the first, 1865, under the provisions of the 
Act of Congress approved March twelfth, 1863, 
entitled 'An Act to provide for the collection of 
abandoned property and for the prevention of 
frauds in insurrectionary districts within the United 
States,' and Acts amendatory thereof, where the 
property so taken was sold and the net proceeds 
thereof were placed in the Treasury of the United 
States ; 

' ' and the Secretary of the Treasury shall return 
said net proceeds to the owners thereof on the 
judgment of said Court, 

"and full jurisdiction is given to said Court 
to adjudge said claims, any statutes of limitation 
to the contrary notwithstanding." 

TIME OF TAKING EFFECT. 

The last section of the Judicial Code is as follows : 

"Se<\ 301. This act shall take effect and be in 
force on and after January first, nineteen hundred 
and twelve." 

[i]' 



A few teat petitions were filed in the Court of 
Claims in March, 1911, in the expectation that the 
Department of Justice, which is charged with the 
defense of cases in the Court of Claims, would raise 
no objection to the preliminary steps being taken 
before the first of January, 1912, including the fur- 
nishing of evidence from the archives of the United 
States Treasury Department and the taking of tes- 
timony in the Southern States of living witnesses. 
Time is of vital importance, since those who survive 
after a period of forty-six years must necessarily be 
of advanced years. 

This expectation has been disappointed by an 
absolute refusal on the part of the officers of the 
Department of Justice to allow any steps to be 
taken under Sec. 162 above quoted until Janu- 
ary 1st, 1912. ■ 

An effort is now being made to secure action 
indirectly by filing petitions in the court under the 
Tucker Act, but here again the Department of 
Justice is making a vigorous resistance and has 
filed printed arguments of a hundred and thirty 
pages in opposition to such procedure. We have 
also discussed the subject in an extended brief. The 
question was argued on May 1, 1911,- and now 
awaits the decision of the court. 

WHAT CLAIMS ARE INCLUDED. 

The right granted under the new law is strictly 
limited to cotton seized after June 1st, 1865. There 
are many unpaid claims for cotton taken in 1863 
and 1864, but the present law does not embrace 
any such claims. These stand precisely as they did 
before this act was passed. It is possible that these 
may be considered by the Court of Claims under the 
Tucker Act, where net proceeds are to be found in 
the Treasury. This question has not yet been 
finally decided. 

RECOVERY LIMITED TO NET PROCEEDS. 

At the close of the Civil War the price of cotton 
was as high as at any time in history. Many claim- 
ants from whom cotton was taken have expected 
to recover under this statute the value of the cotton 
taken. The law does not provide for this. 

[2] 



It provides for payment of only the net proceeds 
in the Treasury. No interest is paid under any con- 
ditions. 

It is well known that the agents who were engaged 
to collect this cotton from the plantations were gen- 
erally paid twenty-five percent in kind of whatever 
they collected. The claimants under the present 
law can not recover for this portion of their cotton. 
The cotton was shipped to the sea coast and then 
usually sent to New York where it was sold. Ex- 
penses piled up at every turn and all these were 
charged against the cotton, with the result that 
when the money reached the Treasury, it repre- 
sented much less than the value of the cotton taken. 
Yet this is all that can be recovered. 

As an instance of the diminution of the value of 
cotton on the way to the Treasury by reason of 
payments to agents for collection, accident, and 
expenses of transportation and sale, it appears in 
the official report of the Treasury Department that 
in four adjoining counties of one State, 30,010 bales 
of cotton were seized, but the total amount realized 
from this was an average of only $61.65 for each 
bale seized. In three other counties 1,810 bales 
were collected and the total net proceeds to be 
divided proportionately among these results in an 
average of only $26.59 a bale. This is unusually 
low, but it is uncommon to find net proceeds sub- 
stantially in excess of $100 a bale. 

NO RECOVERY, IF NO PROCEEDS. ,. 

In a very great number of cases, no money what- 
ever reached the Treasury. Sometimes the cotton 
was burned, sometimes it disappeared in transit, 
and its ultimate destination is the subject only of 
speculation. In other cases, the cotton was sold 
and the money reached the Treasury, but all record 
identifying the cotton with the owner has been lost. 

An instance which has come to our knowledge is 
that claims from one county in Alabama amount- 
ing to about 700 bales were filed in the Treasury 
Department in 1872. The Secretary of the Treasury 
made a report in 1875 of cotton seized after June 1, 
1865, but not a single bale of cotton is reported to 
have been collected in that county. These claims 

[3] 



must therefore fail, although undoubtedly the cotton 
was taken by Federal authorities, unless some record 
not now available is discovered. 

Many receipts have been preserved and are now 
exhibited showing beyond doubt the taking of 
cotton, for which no corresponding proceeds appear 
in this official report. It is probable that some pro- 
ceeds will be found upon more detailed investiga- 
tion which were omitted from this report, but these 
must be exceptions. 

There are some instances where a considerable 
amount of cotton is shown to have been taken from 
one locality, but the names of the owners are want- 
ing. Here it may be possible to prove the total 
quantity taken from that locality and secure a pro 
rata distribution of the proceeds. But many diffi- 
culties lie in the way of such a proceeding. 

Congress passed an act in 1872 allowing claimants 
for cotton taken after June 30, 1865, to present 
their claims to the Treasury Department. Claims 
were presented to the amount of 136,148 bales. The 
total number of bales taken after June 1, 1865, 
shown in the report already alluded to, of which the 
net proceeds reached the Treasury, was slightly in 
excess of one half this number. Thus, it would 
seem that about one half of the cotton seized was 
never represented b}' any net proceeds whatever in 
the Treasury. 

THE DEFENSE OF CLAIMS. 

This law does not provide for payment of the 
claims from the Treasury. It merely opens a tri- 
bunal where claims can be adjudicated on their 
merits. Every claim presented to the Court of 
Claims is a separate lawsuit. The government is 
represented before that court by an Assistant Attor- 
ney-General, an officer of the Department of Justice, 
and a force of sixteen attorneys, many of whom 
have long experience in government litigation and 
who devote their entire attention to defending the 
government against claims there presented. They 
may be expected to raise ami present every defense 
which their intimate knowledge of the subject- 
matter can suggest, whether technical or upon the 
merits of the claim. 

[4] 



Experience so far in connection with these cases 
indicates that the defense will be conducted with 
great activity. Some defenses which will be made 
can now be anticipated, but it is almost the uni- 
versal experience in the prosecution of government 
claims before the Court of Claims that many more 
defenses are ultimately interposed to claims than 
can possibly be anticipated when the claims are 
filed, even by the persons most familiar with the 
subject. 

The great time which has elapsed since these 
claims originated will make it very difficult to meet 
defenses based upon record evidence found in the 
archives either of the United States or of the Con- 
federate government. 

CONFEDERATE TITLE. 

One defense which will certainly be vigorously 
urged is that the cotton taken was the property of 
the Confederate government. This is already offi- 
cially announced. When the Secretary of the 
Treasury was authorized, under an act of Congress 
passed in 1872, to allow claims for cotton taken 
after June 30, 1805, he allowed $195,896.21 out of a 
total claimed, which is estimated on a basis of $100 a 
bale, at $13,614,800.00. This was about one and 
a half per cent of the amount claimed. The balance 
was rejected, chiefly, it is stated in an official cir- 
cular of the Treasury Department, for the reason 
that the Confederate records show that the claim- 
ants had sold the cotton to the Confederate govern- 
ment and it was not therefore individual cotton 
when seized after June 30, 1865, but was the prop- 
erty of the Confederate government. This statement 
is said to be supported by official records from the 
Confederate Treasury Department, showing that 
many planters sold cotton to the Confederate govern- 
ment and received Confederate bonds in exchange. 
The Supreme Court of the United States has said of 
this : ' ' The sale was complete when the bonds were 
accepted in payment. The title then passed to the 
Confederate States without a formal delivery." 

It has been held that title to all property of the 
Confederate government passed to the United States 
at the surrender. 

[5] 



If the cotton for which claim is made was the 
same cotton thus subscribed to the Confederate 
cotton loan, and if the bonds were delivered, it will 
be seen that the claim is likely to fail, on the 
ground that the cotton belonged to the United States 
when seized, unless some reason can be shown 
why the decision above quoted should not apply. 
Here is therefore a question of fact to be decided 
in many cases, dependent upon oral testimony. At 
this late date, it is to be seen that the claimants 
are at a very great disadvantage in being obliged to 
rebut presumptions arising from such records by 
the scant surviving oral evidence or otherwise. 

A. satisfactory explanation can undoubtedly be 
made in many instances that the cotton on hand in 
1865 was not the same as the subscription cotton, 
or that private cotton was taken instead. It may 
also be shown that bonds were not issued or not 
delivered, although the cotton was subscribed and, 
if this omission occurred, title never passed to the 
Confederacy. 

The record evidence of cotton subscription is 
therefore not conclusive, but presents a serious 
difficulty which must be met and overcome by the 
care of the claimant in securing all available wit- 
nesses and the skill of his attorney in bringing out 
the facts and in arguing the points of law. 

LOYALTY. 

It is understood that the claimants for this cotton 
were, in general, adherents to the Southern cause. 
The act, Sec. 162, above quoted, revives the earlier 
act of Congress approved March 12, 1803, and gives 
a remedy under the provisions of that act. One of 
the provisions of that act is that payments shall be 
made to any person applying to the Court of Claims 
upon proving his ownership of the cotton " and 
that he has never given any aid or comfort to the 
present rebellion." It is also provided in Sec. 159 
of the Judicial Code immediately preceding the 
section quoted in regard to cotton claims " that the 
claimant, and, where the claim has been Assigned, 
the original and every prior owner thereof, if a cit- 
izen, has at all times borne true allegiance to the 
Government of the United States, and, whether 

[6] 



a citizen or not, has not in any way voluntarily 
aided, abetted, or given encouragement to rebellion 
against the said Government." 

It is expressly provided that these statements may 
be traversed by the Government and that the peti- 
tion shall be dismissed if the decision is against the 
claimant on this issue. 

It was decided by the Supreme Court of the 
United States in the year 1870, under the original 
act of 1863, that a person who had aided the cause 
of the. South could plead under that act that he 
had been pardoned by one of the proclamations of 
the President issued in 1865, 1867 and 1868. The 
last was a proclamation of general amnesty. The 
Supreme Court said of the pardon, " It blots out 
the offenses and removes all its penal conse- 
quences." It was therefore decided that the plea 
of pardon was equivalent to continuous support of 
the Union's cause throughout the War and that no 
proof of actual loyalty to the United States was 
necessary in those cotton cases. 

We believe that this -doctrine applies to the act 
of 1911 as well as it did to the act of 1863 and are 
confident that it will be so decided by the courts 
under the act of 1911. , Nevertheless itseems highly 
improbable that so important a point as this will 
be left unchallenged by the astute counsel for the 
United States who defend the Government in such 
cases. It therefore seems likely that the entire 
question must be reargued and it may be that, 
before any of these claims can be paid, a test case 
must be appealed to and decided by the Supreme 
Court of the United States on this point. 

TIME OF PAYMENT. 

It may be readily seen after this full statement 
that claimants can not hope to secure their money 
immediately. Much delay will necessarily ensue 
until the defenses by the United States are all con- 
sidered and decided by the court. Any statements 
that these claims will be collected within a year 
from this date are based either upon ignorance or 
design. The experience of a lifetime in the prose- 
cution of government claims makes two things very 
certain : that payment will be greatly delayed and 

[7] 



that the delays will be far more than can be anti- 
cipated at the present time. 

JUDGMENTS BINDING. 

When all these defenses are met, argued and 
decided by the courts, judgments will be rendered 
by the Court of Claims in favor of those whose cotton 
was taken after June 1st, 1865, for the amount of 
the net proceeds in the Treasury, without regard to 
the loyalty of the owner, as we believe, but u,pon 
proof that the title was still in the original owner 
and not in the Confederate government. When a 
judgment, is so rendered, if no appeal is taken, it is 
regarded as an absolute binding obligation of the 
United States and payment is made by the Gov- 
ernment without question. 

APPROPRIATIONS. 

Sec. 162, if read alone, would seem to make an 
appropriation from the Treasury to pay such judg- 
ments, but another law declares that no act of 
Congress shall be construed to make an appropria- 
tion " unless such act shall, in specific terms, 
declare an appropriation to be made." Conse- 
quently, even after judgment, some delay must 
occur because no money is available for pay- 
ment of such judgment without an appropriation 
for this purpose by Congress. The delay is only 
until the close of the next regular session. 

PAYMENT OF JUDGMENTS CERTAIN. 

This law is different from the law under which 
claims for stores and supplies taken during the Civil 
War have been considered by the Court of Claims. 
In these claims, findings of fact are made by the 
Court of Claims for which Congress may or may not 
appropriate in its discretion, and much delay has 
occurred in making such appropriations. Judg- 
ments, such as will be rendered in the cotton claims 
where they pass successfully the scrutiny of the 
court, are paid by regular annual appropria- 
tions, made at each session of Congress. Claimants 
who pass through all the difficulties in the Court 
of Claims may therefore be sure of getting their 
money. 

May 15, 1911. 

[8] •''•'' 



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